RAILWAYS YEAR

Taranaki Daily News, 3 October 1929, Page 17

RAILWAYS YEAR

INCREASE IN REVENUE EXPENDITURE LITTLE MORE PROBLEMS OF DEPARTMENT MINISTER’S STATEMENT Tho gross income from all source! was £8,747,975, an increase of £223,431 on that of the.,previous year, whilst th< expenditure was £6,849,383, an increase of £164,260, states the Minister of Rail ways, tho Hon. W. B. Taverner, in hi; annual statement. Tho net eat Dings were £1,898,592, as compared vvith £l, 839,415, an improvement of £59,177 oi the results in tho previous year. Or March 31, 1929, the capital invested n tho lines open for traffic was £56,568,' 598, an increase of £5,381,222. A sum of £655,986 was charged against revenue for depreciation and provisior for renewals, and tho amount expendec from this fund was £258,836 for assets written off or renewals effected during tho year. The accumulated credit balance in this fund at March 31, 1929, was £!,• 328,020, an increase of £397,150 over tho balance at March 31, 1928. Interest charges amounted to £2,331,335, as compared with £2,130,867 in the previous year, an increase of £200,468. The deficit on account of revenue and expenditure on the year’s working was £432,743, as compared with £291,452 for the previous year, an increase of £141,291; and this increase is principally due to tho unprofitable nature of the Dew lines taken over during tho year, the revenue from which was insufficient to pay working expenses, thus leaving no margin for interest charges. The revenue from passenger traffic totalled £2,124,746, as compared with £2,145,296 in the previous year, a decrease of £20,550, or 0.96 per cent. While these figures are more satisfactory than those for tho previous year, when the decrease was £158,884, .9110 fact must not be overlooked that the decrease in ordinary passenger traffic still continues. FREIGHT REVENUE INCREASE. Freight revenue totalled £4,846,125, an increase of £165,990, or 3.55 per cent., as compared with the figures for the previous year. The principal increases were in grain, butter, cheese, wool, agricultural lime, soft coal, road metal, benzine and artificial manures. Tho live-stock traffic totalled 10,319,768 head, an increase of 560,311 as compared with the previous year. . <? It cannot be denied that the'Tailway position in this ; as in every country in the World has been : .very affected by the introduction of road-motor transport. If we take the passenger figures alone wo' find that as compared with pre-war the revenue is down some fOOOjOOO. Taking also the natural increase that took place in the Department’s- passenger revenue’ prior to' the advent of the road-motor we? Could confidently have expected that the passenger revenue alone, but for- the influence of the road-motors, would have approximated to the amount of the present deficit, and the extra revenue would have been earned with comparatively small increase in expenditure. . The question- therefore arises as to what proportion of . the railway deficit should be regarded as properly payable in respect . of the developmental work of the railways. This obviously will depend on what the railways can be made to . earn in the face of the fact that road-motor transport has now to, be accepted as a permanent factor in ' the transport industry. Before this can be determined it is essential that the respective spheres of railways and road transport should be determined and tho fullest possible me sure of co-ordination obtained. As maters are at present, it would be impossible to say with any degree of certainty what the railways are worth as a revenue-earning-institution. The first step, as it appears to me, clearly is to so the transport industry that the true value of each method of transport can be made clear. NEW WORKSHOP SCHEME. As I understand the genesis of the new workshops scheme, it arose out of two factors—(l) the unsuitability of tho old worksliops for the purpose for which they were being used, and (2) the direct financial benefit that was to be obtain-d from the undertaking of the scheme. With regard to (I), there sems to be no doubt that with the age of the shops —and the fact that they had developed, as was unavoidable, on more or less of a patchwork system as requirements necessitated from time to time—they had arrived at the stage when their operation could not be carried on with a degree' of convenience and comfort to the staff that one would wish for. This would in itself raise a question as to the desirability of undertaking. some scheme for improving them, but it still remains to be determined whether the particular scheme that was adopted was tho one that should have been undertaken. This raises the second question—the financial, results that were expected to accrue from the expenditure that has been undertaken. Estimates -bn such a matter as that seem to me to hinge very largely on tho question of the full utilisation of the shops when completThis in turn will depend/on e fu-ture-requirements of the department and tho ability of the country to provide the finance necessary to enable the various works to be undertaken. Whatever the position in regard to these matters may have been when the scheme was formulated and decided upon, it is undeniable that at present it is obscure. The future expansion of the railways Can h/ti'dly he as great as it has been in the past, while the pressure of other State activities on public finance will tend to make it more difficult to provide money for tho railways on the same scale as has been done in the last decade. What tho actual financial result of the reorganisation will be is a matter that lies very much in the future and depends on factors that cannot in present circumstances be determined with any real degree of certaintv. One of the salient features of the workshops reorganisation scheme was tho centralisation of the heavier vari ties of work. There seems to he some misunderstanding as to the question to which the work of centralisation is being carried. All running repairs and the lighter types of work to rollingstock will be undertaken at the various centres, much as has been the case

hitherto. It is only the heavier repair work that is being,, centralised. This work requires the provision of up-to-d-te machinery. This machinery is expensive and requires to be worked 1 to its maximum capacity, in order that ■ the full economies of its installation may be obtained. It would not be economical to duplicate it, as there is not enough work in either island to kcej more than one set of the heavy machinery employed. Regarding new works, I do not think it wise at the present time to make any final decision as to . what might be done some years ahead, principally for the reason that the railway position is in such a state of flux as may make a decision to-day more or less valueless in a few years. An outstanding example is the case of the Palmerston North deviation, as to which, how’ever correct the decision might have been at the time when it was decided to undertake thework, there is not tho slightest doubt that the conditions as they exist to-day called for a review of the situation, and justified the Government in its decision to stop tho work. ROAD-MOTOR SERVICES. . Another matter of growing importance, and one which will come up more frequently for decision in connection with the department’s operations in the future, is that of the working of traffic by the department through the medium of road vehicles. My own view is that such operations should be decided upon with very great caution. We are by no means in a. position to say that the road-motor operations that are now being carried on in the community are on a sound basis, and I feel that any action on the part of the department in the direction of embarking on road-motor operations to any great extent requires careful examination as it plight have serious results on the department’s financial position. Considerable attention has already been given to investigating the position oi the branch lines so as to determine their value as compared with possible alternative forms of transport. As far as the internal working of the department is concerned, and assuming that the branch lines still remain, consideration of the matter at once raises the question of the more extended use of rail-cars. A committee of executive officers of the department, representing every phase of railway operation that may have a bearing on the question, is now undertaking a thorough and systematic examination of tho position with a view to the formulation of definite ' recommendations — firstly, as to the best method of working the traffic (that is, whether by railcars, road services, or trains) and, secondly, in the event of rail-cars being recommended, what is the most useful type for tho particular service required in each case. In this latter connection the rap’d development that has taken place in recent years in connection with various types of rail-cars, particularly Diesel electric and other similar types, renders it very desirable, more especially in vmw of the Very large issues involved, that we should have first-hand information regarding the most modern types of vehicles' and their adaptability to our. conditions.,.jTo that end I propose to send Abroad,, immediately a competent officer to inquire bn the spot into the actual performance of the. various kinds of rail-cars: on railway systems where they have been adopted. I. confidently expect that during the coming year we shall-be able to formulate definite proposals. : USE OF NEW ZEALAND COAL. Tho figures supplied in the general manager’s report' indicate the pleasing fact that the quantity of New Zealand coal- utilised during the past year amounted to the unprecedented figure of 356,724 tons, representing 84.25 percent. of the total coal consumed. It will also be noted that whereas in 1925 the total importations from overseas amounted to 313,107 tons, which represented a percentage of 76.84 of rhe total consumption, this figure dropped in the year under review to 60,675 tons, or a percentage of 15.75. A renewal fund was established in 1925 with a contribution frmi Jhe revenue account of £553,891. Up to the end of the financial year- 1928-2.) a total contribution of £2,397,988 had been made out of revenue. During the same period the fund had been called upon to the extent of £1,069,968 for die purpose for which it was established, leaving a credit of £1,328,020 as at March 31 last. It is necessary to point out that the making of adequate provision for renewals in a system, as vast as that of the railways, and one in which such a large amount of capital has been invested in assets, whichi rightly must be regarded as of a wasting nature, is a matter on which opiuions might differ [as to what is or is not adequate provision. It is admittedly difficult when any business in conducted at a loss to keep contributions of this nature up to a correct standard. At the same time it is obvious and needs no demonstration that unless that standard of contribution is maintained the ultimate strain upon the revenue of the department for renewals and replacements must be in an increasing ratio as the years pass. The position in this regard is very vividly brought out by the reference made in the general manager’s report under the heading of “Bridges.” The department has over fifty miles of bridges, many of which are now due for renewal or strengthening. This will call for a heavy outlay. The country in making up this -deficiency is simply paying back something it should not have had in the first place.